CHAPTER 2
THE ROLE OF RETAIL
PRODUCT MANGAGERS
LEARNING OBJECTIVES
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To understand the basic stages in the retail product
management process
To appreciate the complexity of the RPM process,
and the variations according to different buying
situations
To understand the structure and function of the retail
buying organisation
To become familiar with the roles played by retail
buyers, merchandisers and category managers
To understand the relationship between the buying
organisation and other departments in a retailer
To be familiar with the personal skills required
RETAIL BUYING ORGANISATIONS
The entity within a retailer that buys in
goods to sell to consumers
 Small retailer: buying carried out as one
of a number of managerial tasks
 Large retailer

 Centralised
 Dedicated
personnel
 Buyers control large sums of money
 Buyers interact with other people who are
involved with RPM
Figure 2.1 A traditional view of the organisational buying process, adapted to retailing
Recognition of retail customer need

Write specification of product to satisfy need
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Search for a supplier that can produce a product that meets specification
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Choose supplier that meets supply requirements
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Specify the order (time, quantity, delivery)
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Evaluate performance of product and supplier
THE RETAIL PRODUCT MANAGEMENT PROCESS:
A TRADITIONAL VIEW
RPM PROCESS STAGE 1:
RECOGNITION OF RETAIL CUSTOMER NEEDS
Recognition of new product requirements
 Tracking existing customers’ requirements
 Information sources available:
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 internal
sales data
 trade publications
 consumer publications, special interest mags.
 suppliers
 market research
 competitor analysis
RPM PROCESS STAGE 2:
WRITE SPECIFICATION OF PRODUCT TO SATISFY
NEED
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Convert recognised need into product
opportunity
Blend a set of features to benefit customers
Formal specification of product features and/or
approval of prototype
NB: This stage often starts the process, with a
suggestion (sometime from supplier) followed by
product market evaluation
RPM PROCESS STAGE 3:
SEARCH FOR A SUPPLIER
Find a supplier that is able to make and
deliver product
 Assess different suppliers for suitability
based on value (e.g. product quality, short
lead time) for price
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NB There may be a restricted choice,
especially if buyer wants a particular
manufacturer’s brand
RPM PROCESS STAGES 4 and 5:
SPECIFY ORDER, EVAULATE PERFORMANCE
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Stage 4: Specify Order
 quantity
detailed, e.g. by size, variety, colour
 in terms of how, when and where delivered
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Stage 5: Evaluate Performance
 of
product e.g. sales, profits etc.
 of supplier e.g. on time, delivery accuracy
 includes qualitative measures e.g. customer
feedback
COMPLEXITY OF BUYING TASKS:
2.1
Table
Buy Class
Stages
Recognition of
retail customer
need
Write specification
of product to
satisfy need
Search for supplier
to produce
specified product
Select supplier
New task
Modified re-buy
Straight re-buy
Yes
No
No
Yes
Maybe
No
Yes
Maybe
No
Yes
Maybe
No
Specify order
Yes
Yes
Yes
Evaluate
performance of
product and
supplier
Yes
Yes
Yes
Adapted from: Davies (1993:66)
Table 2.2 Buying Committees - Advantages and Disadvantages
Advantages:
 Buying is sanctioned by the highest authority, so the decision is not that of the
individual, but of the whole organisation.
 The cumulative experience of many senior people within the retailer is brought to
the decision-making process.
 Experts can be called upon to make a contribution on specific aspects of the
decision.
Disadvantages:
 Gathering the committee takes time, so buying opportunities may be missed
 Senior individuals may use their status to force their personal opinions through the
committee process.
 Different members of the committee will have different areas of expertise and
different knowledge gaps, which may make consensus difficult and lead to
conflict.
LIMITATIONS OF TRADITIONAL
BUYING PROCESS MODELS
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The use of the term ‘buying’ process: buying
is often considered to be one of a number of
tasks within RPM
Product and market specifics often influence
the way the process is carried out (e.g.
seasonal vs staple products)
Relationship between retailers and suppliers
can influence buying process, e.g. length of
time doing business
Concentrate on operational rather than
strategic parts of RPM
CONSUMER-LED RETAIL
PRODUCT MANAGEMENT
Aims to more closely link head office
planning with retail outlet (e.g. store)
activities
 Reacting and responding to customer’s
purchasing; anticipating future needs
through research and analysis (pull rather
than push approach)
 Brings management of demand close to
management of supply
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TRADITIONAL BUYING ORGANISATION
Insert Figure 2.2a
CONSUMER-LED BUYING
ORGANISATION
Insert figure 2.2b
CENTRALISED RETAIL BUYING
ORGANISATIONS (Figure 2.5)
= Flow of products
= Flow of information
Buying
&M
Marketing
Logistics
CENTRAL HEAD OFFICE
Stores
Finance
Property
Non-Store
Operations
Human
Resource
Management
International
Operations
International
Distribution
Centre
Call Centre
Suppliers
Customers
Stores
CENTRALISED DECISION MAKING:
ADVANTAGES
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&
Buying power
Buyers become
specialists
Aggregated sales
data for better
forecasting
EOS
Control
Consistency
Store personnel free
DISADVANTAGES
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Conflict between
head office and
outlets
Feedback channels
may not be open
Centralised buying
may not be necessary
if products are staple
Regional preferences
may not be well
catered for
BUYING ORGANISATION ROLES:
The Buying Director
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Represents all or, in a large retailer, a key part of the
buying organisation.
Not all but some buying directors will be part of main
board of directors
Lead, and set overall aims for, product management
teams
Involved in strategic planning decisions such as
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changing major suppliers, introduction or deletion of product
categories, major promotional campaigns, adoption of
systems and management approaches
Corresponds with General Merchandise Manager or
VP
BUYING ORGANISATION ROLES:
The Merchandise Manager
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Oversee a division of the retailer or a number of
departments
Ensures co-ordination and consistency across
departments
May carry director status in a large organisation
They may be supported by ‘buying controllers’
who oversee small numbers of inter-related
departments
BUYING ORGANISATION ROLES:
The Buyer
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Traditionally the figurehead of a product department
May have shared responsibility with a merchandiser
Concerned with qualitative side of buying
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awareness of consumer trends,
knowledge of product features,
knowledge of supply market
Price negotiation
Work with marketing team on promotions
BUYING ORGANISATION ROLES:
The Merchandiser
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Concerned with quantitative side of buying
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Responsible for financial management of department
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estimating sales
planning deliveries
distributing products to stores
sales analysis
budget planning
profit margin analysis
implementation of price reductions
NB Merchandiser is a term used for a number of
different roles within retailers, e.g. visual
merchandiser
BUYING ORGANISATION ROLES:
The Category Manager
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Combined buying and merchandising role used
in consumer-led product management
Leads a cross-functional team (category team)
Involved in the performance of a group of
products from product idea and introduction
through production, supply, store distribution,
promotion, sales and after sales
More common in grocery / FMCG retailing
BUYING ORGANISATION ROLES:
The Assistant (buyer or merchandiser)
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In large retailers, buyers, merchandisers and
category managers all have at least one
assistant
Assistants play a key role in buying process,
supporting their team leader on operational
tasks.
Training to be full buyer / merchandiser
May take responsibility for part of the range
BUYING ORGANISATION ROLES:
The Buying Assistant
Buyer’s assistant / buying administrative
assistant / buyer’s clerk
 More junior role than ‘assistant buyer’
 Administrative support and routine
duties
 Allocator is a similar junior role on the
merchandising side
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 allocates
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stock to outlets
Graduate entry level
ADDITIONAL BUYING DECISION
MAKERS
Technologists
 Quality Controllers
 Product Developers
 Corporate Designers
 Logistics managers
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THE BUYING COMMITTEE
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A group of people from different parts of the
retail buying organisation who meet to
discuss and sanction buying plans
Combines experience, expertise and different
points of view
Decisions are sanctioned and therefore
supported by whole organisation rather than
individuals
Time consuming and consensus may be
difficult to achieve - buying opportunities lost
THE RETAIL ‘DMU’
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THEORETICAL ROLE
 user
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RETAIL ROLE

customer, represented by
sales personnel or
market research
technologists, designers,
product developers etc.
 influencer

 buyer

buyer, assistant buyer or
category manager

merchandise director

merchandise manager or
assistant buyer
 decider
 gatekeeper
DESIRABLE ATTRIBUTES IN
RETAIL PRODUCT MANAGERS
Analytical
 Good communicator
 Objective
 Product knowledge
 Degree
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THE BUYING GROUP
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A buying organisation that acts on behalf of a group
of independent retailers (may include franchisees)
Provides product management expertise for those
without own internal resources
Combines orders to obtain better terms for retailers
May provide other services such as market trend
analysis, visual merchandising and marketing
Examples: ‘symbol groups’ e.g. Spar or Londis,
international buying group AMC, AIS